I’ve received a lot of correspondence about HR 3808, a bill about electronic and out-of-state notarization that Reuters wrote could make it harder in the future to challenge foreclosures.

A bill that homeowners advocates warn will make it more difficult to challenge improper foreclosure attempts by big mortgage processors is awaiting President Barack Obama’s signature after it quietly zoomed through the Senate last week.

The bill, passed without public debate in a way that even surprised its main sponsor, Republican Representative Robert Aderholt, requires courts to accept as valid document notarizations made out of state, making it harder to challenge the authenticity of foreclosure and other legal documents.

The timing raised eyebrows, coming during a rising furor over improper affidavits and other filings in foreclosure actions by large mortgage processors such as GMAC, JPMorgan and Bank of America.

Questions about improper notarizations have figured prominently in challenges to the validity of these court documents, and led to widespread halts of foreclosure proceedings.

The legislation could protect bank and mortgage processors from liability for false or improperly prepared documents.

The White House said it is reviewing the legislation.

OK, so everyone focuses on “how did this pass so quickly without anyone knowing about it!” But we might want to focus on the text of the bill. It’s very short. Other than the title and boilerplate, here’s the entire bill:

SEC. 2. RECOGNITION OF NOTARIZATIONS IN FEDERAL COURTS.
Each Federal court shall recognize any lawful notarization made by a notary public licensed or commissioned under the laws of a State other than the State where the Federal court is located if–
(1) such notarization occurs in or affects interstate commerce; and
(2)(A) a seal of office, as symbol of the notary public’s authority, is used in the notarization; or
(B) in the case of an electronic record, the seal information is securely attached to, or logically associated with, the electronic record so as to render the record tamper-resistant.

SEC. 3. RECOGNITION OF NOTARIZATIONS IN STATE COURTS.
Each court that operates under the jurisdiction of a State shall recognize any lawful notarization made by a notary public licensed or commissioned under the laws of a State other than the State where the court is located if–
(1) such notarization occurs in or affects interstate commerce; and
(2)(A) a seal of office, as symbol of the notary public’s authority, is used in the notarization; or
(B) in the case of an electronic record, the seal information is securely attached to, or logically associated with, the electronic record so as to render the record tamper-resistant.

SEC. 4. DEFINITIONS.
In this Act:
(1) ELECTRONIC RECORD- The term ‘electronic record’ has the meaning given that term in section 106 of the Electronic Signatures in Global and National Commerce Act (15 U.S.C. 7006).
(2) LOGICALLY ASSOCIATED WITH- Seal information is ‘logically associated with’ an electronic record if the seal information is securely bound to the electronic record in such a manner as to make it impracticable to falsify or alter, without detection, either the record or the seal information.

That’s it entirely. Out of state notaries can notarize documents, including with e-signatures. And there’s a serious split in the legal community over whether this would mean anything to the foreclosure mess.

Basically, notarization means that a notary public witnessed the act of signing and identified the signer. If a document is fraudulent, whether the notarization came from in state or out of state is of little consequence. The Reuters article says this act would “make it harder” to challenge foreclosure documents without saying how. In fact, nobody has properly explained how this would make it more difficult. The legal term of art is that notarization gives something the “presumption of truth” and the “presumption of validity,” but those terms don’t appear in this bill, and the foreclosure documents being challenged were already notarized. The banks are already doing fraudulently what some in the legal community fear they would be doing fraudulently if this bill passes.

Most important, this bill would take effect after signage, and I’m at pains to figure out how the millions of foreclosures and their documents already filed would be affected by this in any way. I see nothing about retroactivity in here.

It seems to me that some lawyers may have used the notarizations issue to get at the broader fraud, like a cro-bar to pry open the door. And going forward, the cro-bar may not be as available, though I’m still trying to figure out why. But that doesn’t impact what’s already been done. I cannot see my way clear to calling this TARP 2 based on the given information.

I am not a lawyer, and it’s entirely possible I’m missing something. The Secretary of State of Ohio, Jennifer Brunner, seems to have a problem with it, but again, in her entire statement, I can’t pick out anything that would actually be a problem, instead of some shadowy, undescribed menace. And the Ohio Attorney General, who is likely to have had knowledge of this issue, had no problem filing a lawsuit yesterday against GMAC.

I’ll be doing some more digging on this today. I’m sorry if this answer is unsatisfactory, but in the comments, I’d like anyone to specifically tell me how HR3808 would 1) affect foreclosure document fraud that has already been committed, and 2) affect it going forward.

UPDATE: OK, Armando, who is involved with some of these cases, has given the best explanation of why this bill could represent a hindrance:

What has been happening around the country in foreclosure proceedings has been the denial of due process for homeowners who want to challenge the veracity and validity of the evidence that the foreclosing parties have been introducing as evidence. This law will only exacerbate this problem.

At the very least, a legislative history and clear definition of what Congress means by the term “recognize” is required. The President must veto this bill and send it back to Congress so it does its work of properly drafting this legislation.

As he says, it all hinges on the meaning of the term “recognize.” You could read that as simply that an out-of-state notarization would have the same standing under the law as an in-state notarization. Armando seems to be saying it could be construed to view a notarized document as a public record, leading to their blanket acceptance without challenge. More here.

Again, how would this affect current cases and current challenges with documents under the old rules?

I’m with you in that I don’t really see how it could affect any foreclosures already in the pipeline – isn’t it against the law to make laws “ex post facto” even though they did with the telecom immunity act, so maybe they’ll try to do something like that? (Stream of consciousness reasoning)

Electronic signatures are becoming more common in just general business – they may be required to for stock transfers online, real estate documents, etc., but most of those transactions don’t require a notarized signature in the first place.

I think the crux of the Attorney General’s concern is in this sentence -

“Some states have adopted “electronic notarization” laws that ignore the requirement of a signer’s personal appearance before a notary.”

Which is interesting because it seems that would void the whole purpose of notarization in the first place.

Ha- maybe the whole bill was designed to make the job of the robo signers even easier – they were signing 10,000 documents a month without reading them, they could probably up their robosignage to 100,000 a month if not more! If I were a robosigner, I would start a union and demand to be paid by the signature. Or perhaps this bill was designed as part of an OSHA package to help reduce carpal tunnel syndrome and costly workers comp claims for robo signers – all very humanitarian.

The notarized signatures in the foreclosure fraud cases seem to come up in the following situations:

*The robosigners signature being notarized later by a second party
*The robosigner signature being done by several people and then still being notarized

That’s where the Ohio Attorney General’s concern might be valid.

But, to me, that is the least thing to be concerned about.Not to downplay it, but faulty notarization, while illegal, is not the central issue.

The central issues have to due with completely falsified case files being attested to as being “examined” for truthfullness and completeness and the wholesale fraud of manufacturing fake documents after the fact. How does electronic notarization affect that?

Plus the various and sundry issues of preying on consumers as victims by having them go through fake remodification programs when the plan was always to foreclose, hitting them with unjust and outrageous fees for services that may or may not be provided, faulty service deliveries, violating UCC codes, SEC rules, misrepresentation of the loan, fraudulent conveyances,other misrepresentations, misrepresentations, straw lenders, non-recordation of notes, bypassing recording fees, breaking the chain of title, and on and on and on. I don’t see how electronic notarization affects any of these issues. Plus, perjury is perjury whether is is committed electronically or physically. Electronic notarizations could potentially open those who employ it wrongfully to look at additional counts of wire-fraud.

Jennifer Brunner is Ohio’s Secretary of State. I took it that she doesn’t like the possibilities that arise when there’s no in-state, actual person, traceable chain. In the instance of foreclosure, one would like to think there are some legal limits and safeguards but the facts adducing otherwise speak to Brunner’s concerns. People are being forced out of homes, in FL homes are being broken into, and the government agencies people hope are emplaced to stop that sort of behavior don’t even concern themselves. A few outriders are getting into action now, but how many people are already damaged? Barn doors and horses rise to mind. Brunner doesn’t pretend to be a lawyer, but she does have authority over notaries and that’s the position from which she raises her flag. Good that someone has.

The term “electronic signatures” jumps out to me because my understanding is right now banks are required to have wet ink signatures. That was what led to this mess, banks tried to save money by not doing all the paperwork.

Nonetheless, your point still stands, even if electronic signatures are allowed from now on, banks still have a problem of creating a paper trail of past events.

WASHINGTON (MarketWatch) — The U.S. banking industry is entering a new crisis where operating costs are rising dramatically due to foreclosures and defaults, a well-known analyst said Wednesday afternoon.
…
“Rising operating costs in banks will be more significant than in past recessions and could force the U.S. government to restructure some large lenders as expenses overwhelm revenue.”

The central issues have to due with completely falsified case files being attested to as being “examined” for truthfullness and completeness and the wholesale fraud of manufacturing fake documents after the fact. How does electronic notarization affect that?

Electronic notarization is not the issue. The issue is the presumption of validity created for out of state notarizations (whether electronic or otherwise).

As a result of this bill, individual states will lose a big portion of the power to enforce their own certification processes. Instead, states must accept whatever affidavit is generated from whatever other state notarizes the document – regardless of how lax the requirements in that foreign jurisdiction may be.

What you get then is a race to the bottom for notarization standards, so that the state with the most cursory requirements becomes the place that gets all the notary business. As an analogy, think South Dakota for credit cards or Delaware for incorporations.

Electronic notarizations just exacerbate the validity problem because they are far easier to generate and far harder to challenge, but the underlying issue remains that states have little recourse to ensure that foreign documents submitted to their courts have been properly certified.

Might as well just call it, “The Rubber Stamp Enforcement Act of 2010″.

I lay it out in some detail here in the comment on the Harry Reid thread and in my comments over at the Talkleft posts I linked to in that comment.

While I do not disagree with Armando about the importance of defining “Recognize”, I also look at the way the act adopts definitions from 15 USC 7006. While it specifically adopts only the definition of “electronic record, it needs to adopt the definitions of “electronic” and “record” to have “electronic record” make sense. These definitions are as follows:

(2) Electronic. The term “electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
* * *
(4) Electronic record. The term “electronic record” means a contract or other record created, generated, sent, communicated, received, or stored by electronic means.
* * *
(9) Record. The term “record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

As I see it, this Act obviates the need to produce the blue ink original of the documents. If all you have to do is produce the “electronic record” containing something which purports to be a notarization, you need never produce an authentic original document. So, every species of fraud we have seen – two lenders both claiming to own the same mortgage and foreclosing on a property, lenders foreclosing where the property was bought without a mortgage, forged documents of all flavors, backdated notarizations, after-the-fact documents – every last one, will be ratified and given effect.

I view “recognize” as meaning “must be admitted into evidence”.

Given the propensity of judges to not want to read the documents and only to issue foreclosure judgments, none of this fraud will be rooted out.

Going forward, it’s an even worse mess being created. Remember those “freemen” and militia groups of the 90s who would create liens and slap them on the properties of people who offended them, with an eye toward making money and trouble? Get a notary stamp, and all those are valid.

If a scammer wanted to create documents out of whole cloth and stamp a notary on them, he could and a judge would have to recognize them. I recently beat back a bill collecting company that was trying to force me to pay money for an alleged debt which never existed. I did that by asking them to sue me if they thought they had a valid debt and telling them that they were admitting it was invalid if they didn’t sue. They went away. With this law, they could create a document claiming I owed them whatever amount they chose, slap a notary stamp on it, and every judge in the country would be required to recognize that claim. It’s sort of like the old doctrine of contracts under a seal – they had a presumption of validity and were very difficult to prove as invalid.

This is a nightmare.

And Harry Reid deserves to lose solely over this – he let this come to the floor and let it pass by unanimous consent.

Thanks, there could not have been anything benign about this measure. Perhaps Harry Reid rushed it through because he knows he is going down in defeat. In retirement, he can now expect favors from the mortgage bankers.

The thing about e-signatures is that it doesn’t eliminate the witnesing the actual ink on paper signature. It just makes a document with an “e-signature” eligible for e-filing purposes.

The crux of the foreclosure fraud matter as I understand it, as a lawyer who does a fair amount of real estate work, is that the lenders/banks did not retain or get all of the original documents for the mortgages or failed to pass them on up the chain as they were assigned and bundled into pooled mortgages: the tranches in the CDOs. Now that the paper has been passed along, these documents either were never obtained, were fraudulent (n the sense that the notarized signatures were fake) or were lost somewhere in the shuffle.

Having seen how sloppy real estate closings have become in Minnesota and Wisconsin where I practice, with the closing business was taken over by barely trained individuals, it is not surprising that the documentation got screwed up. I handled a few closings for a national mortgage originator usually for refinancings or second mortgages. The documents for one closing were at inch and half thick. Someone could easily get lost in this maze of documents. I know a lot of documents were filed late or not at all.

It would not be surprising if there were a lot of scam-artists operating in this milieau who could package up a lot of official looking paper and pass these off as mortgages up the daisy chain.

The problem with digital signing that I’ve seen is it potentially automates fraud.

We have a system where digital signatures are affixed to contracts and disclosures by sending them to an email address, where the recipient “view” and “signs” the documents.

However, the email addresses are not attached as an audit trail to the documents, leaving open the possibility that any person could set up a email address in a third party’s name, send the documents, digitally sign them, and then represent the third party had signed the documents.

Electronic signatures are less secure than ink signatures, and do not prevent, nor preempt the claim of fraud. It does make it very difficult for one to prove the digital signatures are genuine, because of the lack of audit trail.

Notaries do not authenticate the document. Rather, they authenticate the signature[s] on the document. Specifically, that the signer is who the signature indicates they are and that the signature was willfully and
knowingly given.

My experience with these closings and the resulting paper is similar to yours.

As we discuss fraud there needs to be a distinction made between procedural fraud [paper screw-ups} and substantive fraud [debt and security instruments being changed or misrepresented in a manner harmful to the mortgagors].

As you say Reid and the Congress in general are all at fault. At the point that electronic text, which is easily forged under all but the most strenuous of encryption techniques can be “notarized” by any notary in any state the applications for fraud, far beyond the current mortgage morass, creates the potential to unleash serious problems. If someone wants to claim ownership of someone else’s property all they need is a real looking notary image to embed and perhaps get a real notary, from a state where notaries licenses are easy to acquire, to do along. Electronic documents should never have standing in the way that physical documents held by trustworthy repositories have.

The fact that this was snuck by with apparent unanimous consent should be very, very troubling.

This was engineered by Patrick Leahey and jeff KKK sessions,
Apr 27, 2010: This bill passed in the House of Representatives by voice vote. A record of each representative’s position was not kept. Sep 27, 2010: This bill passed in the Senate by Unanimous Consent. A record of each senator’s position was not kept.

From Zero Hedge 9 am

‘Bill H.R. 3808, the Interstate Recognition of Notarizations Act of 2010, which was discussed yesterday, and which according to both Reuters and the NYT may have a material impact on mitigating the impact of the High Freq Signing scandal, at least on the servicers, is now open for public comments at the white house.

Those wishing to tell the president how they feel, may do so at the following link:

We are confident the White House will promptly disclose all the “well-mannered” comments advising the administration on all sorts of anatomically impossible acts it should engage in should Obama sign off on this.’

Even more egregiously, this thing passed by unanimous consent, which means any single Senator could have derailed passge by objecting – yet not one of them had the guts to stand up to the banking lobby.

The thing people don’t seem to be grasping – not without reason – is the pervasive place notaries have in the legal system. It’s not just mortgages and notes that get notarized, though we have all justifiably concentrated on that aspect, the frauds being exposed by the current unwinding of the real estate bubble, and the potential for this act to legitimate and ratify all those frauds.

Wills are notarized. Contracts of all sorts are notarized. Affidavits – for use in court and out – are notarized. Applications for all sorts of jobs and other things ar notarized. These are just a few examples.

Suppose someone wanted to steal your rich aunt’s estate. They could create a new will leaving your aunt’s estate to them and have it notarized, in a differnt state. A judge would have to recognize that document and you’d have a fight over whether the one the fraudster created or the one your aunt legitimately created was the real one and you’d probably be deprived of the ability to argue – to get rid of the case ab initio – that your aunt never went to the state where the fraudster had the “will” notarized.

Suppose someone wanted to steal your house. (I have handled a couple cases like this.) They could prepare a deed from you to them, take it to a notary, and then present it for recording. A judge would have to recognize that document, even though it was a total confection of fraud.

And so on.

The real danger is not in the low-level street hustling schemers – Aunt Edna’s handyman who forges a deed or a will. They will be found out. The real danger lies in the companies which buy debts (or allegations of debts) or personal information databases or both , and then will (in some percentage of cases) turn around and create debts which never existed for their own profit. They will hire a local lawyer to collect the debt and if necessary sue you and point to the out of state notary as something which has to be recognized. And you will be hard-pressed to come up with the testimony and evidence you could come up with were the schemer Aunt Edna’s handyman. You never met those out of state people and never had dealings with them, but they have sealed documents saying you owe them money. How do you oppose that?

David, you need to rewrite your headline. The very last thing HR 3808 would do is stop the fraud. It is clearly intended to facilitate the fraud and immunize it from defenses. (Whether it is fully effective as written is, of course, a much more difficult question. I note one pitifully narrow saving grace: while the bill purports to validate out-of-state notarizations, it seems to leave notarizations made within the state where the court sits subject to attack for fraud and other irregularities.)

Your headline should be rewritten to read something like this: “Does HR 3808 Eliminate All Defenses Against Foreclosure Fraud?”

Exactly so. A few years back some right wing types started claiming that they owned assets that they could not have gotten, because they wanted to harass various individuals via so called “common law” claims. Allowing electronic notarization from remote locations would bring a whole new level of fraud. Bypassing the states rules for timely reporting of notarized documents by making non-physical documents equal standing with physical ones would make tracking ownership over time for proper title ownership a logistical nightmare.

In case some folks have not been in the situation have having to take property from someone for defensive purposes, the oldest claims are settled first, even if nearly no one else knows about them. Electronic documents can generally have the arbitrary date assigned by the author – all that is needed is a “valid” notarization.

I am an attorney here in Texas, and I actually do real estate law. I have represented all sorts of parties in this mess (except the lenders – I don’t represent them). I’ve seen foreclosures where the Lender got the Trustee to credit bid on the property for OVER the amount that was listed on the last publicly filed deed of trust. That means there was a WINDFALL on the sale.

IN Texas, that windfall goes to the next lienholders down the chain, and then to the HOMEOWNER as a reflection of EQUITY owed to the homeowner. However, in these instances, these homes were FHA homes. That means they are INSURED. The Lender gets the value of the Loan back from HUD when it gives the property to HUD upon completing the Foreclosure process.

So, the Lender never loses a penny, and then HUD has to resell the property on the open market. When the Lender overbids to regain the property at a Foreclosure Sale, it means it is pocketing the windfall. It is going to get all that money back from HUD. Now, whether the Lender is submitting the CREDIT BID amount to HUD or the PROMISSORY NOTE to HUD is immaterial. The Lender is keeping that windfall.

In my capacity as attorney for homeowners or Homeowner Associations (I do both in different neighborhoods), I’ve personally run into this multiple times. In each case, I represented a party that was being denied its right to a portion of that windfall. When I presented my claim to the Lender’s Counsel, I was always given the run around. I would see “notarized” documents of all sorts. I saw “amended promissory notes” with notarizations. I saw all kinds of “notarized” documents that attempted to justify why the Credit Bid was higher than the last recorded Deed of Trust.

Remember, anything that is NOT RECORDED is not public record. I consistently made the argument to these Lenders’ counsel that if it was not RECORDED in the COUNTY RECORDS, then it was not a valid number. They couldn’t just magically produce “notarized documents” that were not recorded.

I won each time with those arguments. The lenders’ counsel did not want to get into a pissing match in court over the validity of their “notarized” documents.

But I will be honest — I was trying to avoid that as well. I don’t know if I could have won or not. I think the law is on my side in that regard, but the real question is always if the JUDGE is on my client’s side. And the two are different things. Judges can and often do rule in ways that are not consistent with the law. That is what APPEALS are for.

My concern with this law is that it creates TOO MUCH GRAY AREA to allow Judges to do exactly that. To rule in a way that hurts my clients and helps the Banksters force my clients to APPEAL THE RULING.

And that costs more money, more time. And for people losing their homes, that is not a luxury they can afford.

So, lets realize that this is enough to give wiggle room to Banksters to win trial level court cases, even if they ruling is wrong. And it creates that much more sand in the eye for them to throw at attorney’s like myself who are chasing them down.

A side note — the only effective way I can defeat this sham argument is when my client or the homeowner has kept the copies of the Statutory Notice Letters that were sent. The dollar amount owed in those letters has to match the amount Credit Bid at the Sale to prevent the lender from keeping the windfall.

Now of course, the Lender could just lie on the Statutory Letter as well. In that case, we haved to demand proof of the Promissory Note. But these lenders are so brazen that they are jacking up the Foreclosure Sale price b 10,000 to 20,000 more than the Promissory Note was at signing. This is very high. Legal fees for foreclosure almost never get that high. They tend to hover at $1500 to $2500.

So, this law IS A PROBLEM in that smoothes over the “Cro-bars” that are used to identify fraud. And it makes it much easier for Judges to rule to their heart’s content, rather than the law’s content. And that makes APPEALING THEM harder. Unless the Appellate Court can review the lower court’s decision de novo, then the Appellate Court is allowed to give much more latitude to the findings of the lower court.

I’ve prosecuted S & L and federal tax fraud involving forged signatures on backdated real estate documents. H.R. 3808 would make such cases more of a nightmare than they already are.

If someone who allegedly forged a signature is in another state, this hikes the costs of investigation. It can make it difficult or even impossible either to get the person’s testimony, or to prosecute him or her.

Off to file a comment with the White House on the link that David Dayen provided, in Cbl2′s comment 30, above, or on that provided by myshadow at 34, above.

Let me make another point about the “out of state” issue for this. From the perspective of a litigator in the trenches.

When I want to challenge a notary’s seal, I have to subpoena that notary. In Texas, the civil rules allow me to subpoena with contempt of court backing anyone within 150 miles of the courtroom.

What do I do with Out of State notaries? WEll, I can “Subpoena” them, but the State courts of Texas don’t have the ability to hold them in contempt for failing to answer the subpoena.

Now, just realize that all these Lenders incorporated in the Dakotas will stop using “local” notaries. Now, they will use Notaries in their state of incorporation. How are attorneys representing these homeowners going to subpoena them effectively?

The general argument I and others are making is not that this bill in and of itself is a silver bullet that kills all litigation. WE are arguing that this bill gives too much ammo to the Banksters in getting away with it, and makes the litigation that much harder for those trying to stop them.

And right now, do you think we need another LAW passed that does that? We should not have Obama stacking the deck AGAINST homeowners. This is the worst timing for this law. If anytime is ever good for something like this.

That is a fascinating and enlightening post. Thank you. Just brings out yet ANOTHER avenue for illgotten gains for the Lenders.

It appears there is a lot to dislike in the bill that is not apparent to an unprofessional. I truly thank the members of the legal profession who are going out there and jousting on the side of the Rule of Law and the right of the citizen to have a fair and just process when they are deprived of their property.

I guess as some have pointed out, the tipoff should be the procedures used to get this law passed. People generally only hide that which should be hidden.

Harry Reid, Nancy Pelosi, and Obama know what this Bill does, let us not all become Morons! Again Obama is intentionally attacking the middle class of USA with more toxic legislation that benefits his corporate overlords.

Glad to be of help. I’m just an “F-ng R*tard” that was called part of the “Professional Left.” That was the primary reason people like myself are coming to the Beacon of “professional leftism” and the home of “F-ing R*tard” – Firedoglake! I was vilified by the Republicrats for being a “trial lawyer” and the tort reform I’ve seen in the past decade alone, both at the Federal and State level, has been a MAJOR setback for consumers, borrowers, employees, and patients (90% of the American public) while those tort reform measures were MAJOR VICTORIES for the other 10% of America (Lenders, Employers, Insurers and Multinational Corporations).

Funny how the GOP can hold up legislation benefiting ordinary Americans willey-nilley but so called progressives in the Senate are impotent in stopping Corporations from putting their foot on ordinary Americans neck.

What more must happen for you to realize that Americans are being screwed by some of the very people we voted in to office.

The only net result of THAT disaster in 2003 was that it effectively ELIMINATED Medical Malpractice as a practice area for attorneys. I cannot count on both hands and feet the number of med-mal attorneys that I PERSONALLY KNEW who no longer take or defend those cases. They now do other forms of law. That is because the standards for a patient to bring a case so high now that they pretty much have to prove that the doctor INTENTIONALLY MURDERED the patient before the attorney will take the case. And the damages limitation is so ridiculously low, that most attorneys will no longer take them on contingency. The reason? The costs of expert witnesses and animation of evidence to properly explain the concepts to a jury are now so expensive that they eat up most of the damages award.

Texas effectively made health care delivery liability proof. Rick Perry brags that Texas has the highest influx of doctors from around the nation, cmoing to TExas to practice medicine. True. But that is why FEDERAL BASELINE MINIMUMS should have been in place. Other states are losing doctors because Texas now makes medical malpractice impossible to prove. Even the most incompetent practitioners can show up drunk and botch a surgery with a slap on the wrist and a small fine to worry about.

Oh, but don’t worry – MALPRACTICE PREMIUMS still went through the roof on those doctors. And healthcare costs in the state are now so out of control that Texas now has the highest number of uninsureds in the nation. Madness.

Armando is correct, it destroys due process the way non judicial foreclosure does. It forces one state to accept the product of a notary in another state without any judicial control. It forces a party that wishes to challenge it go and depose the notary and attempt to find the fraud that may be the only recourse to the party affected by the notarization.
The feds appear to wish to take over powers that are limited by the state, and require real proof of people, notaries, that are not trained, and have few requirements of intelligence or oversight of their notarizations. Believe it or not, most foreclosure documents include altered notarized documents now. So what is going to change if this bill is authorized? They will be forced to be accepted. Documents created by foreclosure mills that admit their work is fictional will be notarized and thus unquestionable without extreme expense to track down one notary.
the concept is aimed at destroying the law of proof and personal swearing, witnessing and documenting that which the law demands.
Get Bmaz or one of the attorney crew in on this please.

Ditto in every respect.
Here is a link to a transcript of a deposition of an employee in one of the mills., http://mattweidnerlaw.com/blog/wp-content/uploads/2010/10/Bombshelltranscript.pdf. The person describes how the documents were created either in house or in an office in either Guam or the Philipines. The signer/affiant was alone without a notary, (which is a no no here in Florida.) Notarization went on in another room and all the notary stamps were used by whoever and whenever, which should generally be wrong anywhere. That’s just one of the mills. We have at least four prominent mills here in Florida.
This is absolution for every act the Banks have done. And remember, we have not seen the end of the foreclosure process. There are millions of loans on the edge of default that have not entered the process yet.

Those – tax fraud and bank fraud cases – are areas I didn’t even think of as being affected by this law. And, boy, will they be affected.

I’ve handled more than a couple cases where someone tried to steal a house or an inheritance and in all of them bogus documents with a notary seal were at the core of the case. In the one, a gangster and his wife schemed to steal several houses from the wife’s sister (the two women looked very similar, especially on photo ID) and tried to do so by forging deeds through strawmen. When that didn’t work, the sister was murdered in front of her house (though the gangster “happened” to be out of the country at the time) and then they tried to get them from the dead woman’s son who inherited them. Last I heard, the gangster was still in prison for trying to hire a hit man to kill the dead woman’s son (gangster planned to be out of the country when that hit went down) when he wouldn’t sign the houses over.

But forged documents were at the core of that case and the notary was a central player.

I think you have the right of it; the definitions of “electronic record” and “electronic signature” are far to vague and don’t include any standards for reliability. It is another version of the problem with voting machines; while reliable, secure systems are probably achievable, especially since there are no requirements for secrecy, so far these systems are not mandated and have not been designed. All it would take is one state to adopt loose standards, and the foreclosure and fraud mills would all move there.

I voted for you twice in 2008 – once against Hilary in the California Primary, and again for President of the United States. I think you’re a great man, a loving father and husband, and an incredible intellect.

I have, however, been very disappointed in your performance as POTUS so far. My family desperately needs a public option for healthcare. We’re currently on Medical but the care provided is less than stellar.

A LIVING wage would be incredibly helpful. You have two daughters, I know you understand the stresses of providing for them and trying to give them the best. I have two daughters as well, and along with my wife of 7 years, we survived on just over $18,000 last year. Could you raise your kids on $18,000 a year, Mr. President?

There has been no significant job creation. I’m perfectly willing to give credit where credit is due, and over the past six months our country has stopped shedding jobs at high rates, but we are not gaining jobs. The good jobs we’re losing, high paying jobs, are not coming back from China, India, etc. Folks like myself and my wife have to work in service positions that pay relatively little. Since the Reagan years we’ve morphed into a service-based economy, and the services we provide aren’t valuable enough to sustain our populous. You promised us a green energy industry and the creation of new jobs as a result. Instead, what we get is Tesla re-opening the NUMMI plant and my brother having to pay $700 to be trained to work there.

I’m getting carried away here. The point I’m trying to make, Mr. President, is I admire you. I voted for you because I believed in the change you promised us. I wept with pride at being a part of your campaign as I explained to my 7 year old how special you were, and what you would mean for America. I’ve been disappointed, though, and am now feeling very dejected. You haven’t lost my vote yet, but you’ve lost my vote of confidence.

By VETOing HR 3808 you could go a long way to restoring that confidence. This bill is unfair, malicious, and helps no one but the banks. TARP has helped them out enough. We don’t need to assist them in taking people’s homes, as well.

Mr. President, a very clear line is being drawn in this country between the haves and have-nots. When the haves start taking the have-nots homes, just amass wealth and property, we are no longer a democracy.

Our democratic system, as flawed as it may be, is what makes America great. I don’t know you, Mr. President, but I know your words. I listened to all of your speeches. I see you with your daughters and your wife. You’re a great man. I know you don’t want to be the man at the helm when our storied democracy fails.

Please veto HR 3808. We need to stop this downward spiral. I need you to show the leadership that inspired me to vote for you. Please, Mr. President. For the sake of all the Americans who are losing their homes, many of whom voted for you. For the sake of your daughters and mine. For the sake of our country. Veto this bill. Take a stand.

Obviously the banking industry is 10 steps ahead of everyone else. They saw that their foreclosure proceedings were full of technical fraud. As a finger in the dike sort of thing getting this through was a feather in their cap and they must be really pissed their victory was stopped at the one inch line.

The thing about this foreclosure process mess is it is not amenable to fixing with some winks and nods among the big boys. It has escaped the back rooms and entered into hundreds of court rooms. While 90% of all judges have total deference to institutional power vs citizens even they will not be able to fix things with so much unsettled law and obvious fraud being played out right in front of them.

This foreclosure process mess is a gigantic problem for the banks and the macro economy.

This is slightly off topic, but really just more specific.
How does a real person pursue this line of inquiry?
As a MN resident, who just filing for bankruptcy, and expect foreclosure papers any day, this thread is relevant to me. Also relevant is Masaccio’s article from Friday on Bankruptcy effecting Foreclosure. “http://seminal.firedoglake.com/diary/75021″
I obtained a copy of my property’s Legal Description, and the City Recorder lists only the mortgage originator, not the bank who bought my mortgage and has been collecting the monthly payments for the last 4 years. How can I combine my bankructy with an inquiry as to who I actually owe money to? If the bank that purchased my mortgage has not filed their paperwork with the City Recorder, how can they hold a claim against me for the mortgage debt that should be recoded at the time of my bankruptcy?
If the new bank shows no paperwork, or unsigned paperwork, or for certain un-Recorded paperwork, how can I get my attorney to ask that the court declare that this debt is dischargable because there is not a valid mortgage to protect this debt?
I suspect my bankruptcy attorney will not want to pursue this line of questioning, as he does so many bankruptcies these days, that his approach is formulaic. He will fear that the bankruptcy trustee will look suspiciously on my case if I look too greedy. How do I proceed?

For most bankruptcies, the only way to get rid of the home loan is to be willing to lose the collateral securing the loan.

The debt will still be due after the bankruptcy proceeding, but during it you get a reprieve from all collection efforts. That includes a freeze on any foreclosure process. Until the Automatic Stay is lifted.

Whether you can assert that they have no standing to foreclose is going to be a local county court matter – and will hinge upon what kind of proof they have with respect to assignment of the note.

First of all thank you for your response.
As I understand bankruptcy, it dismisses the Promissary note aspect of the mortgage, but not the monetary amount owed. However, if the title is still actually held by a bank that has sold the mortgage, but is still the only party on the Title, and the new bank is not on the Title…then who holds the Promissary Note, and who will later try and foreclose? Do I list both banks just to make sure I am covered?
I actually own two properties, one I am willing to let go. However, letting the one be foreclosed upon, will negatively affect the value of the other (next door). Can I try to sell either of them, or if the new mortgage holder is not Recorded after 4 years, is the title to the property clouded?

Honestly, I’m not sure that’s the case, but I don’t know how the Bankruptcy Courts in MN would handle that. But I don’t think the bankruptcy discharged the note. Prior to 2005, Bankruptcy Judges could force the lenders to rewrite the loan, and lower the principal to match the fair market value of the house, with new interest rates put on, but with a reflection of paid-in equity being applied. That was the procedure known as “Cram-Down” (because it literally CRAMMED DOWN the principal on the lender). Bush II eliminated that provision of the Bankruptcy Code (and OBama campaigned that he would restore it… but he NEVER will as long as Wall Street is his de facto Treasury Department).

If you are in Chapter 7, you may be able to get it dischaged, but in Chapter 13, you will be under the Court’s supervision for the next 3 to 5 years after the bankruptcy. Literally – your bank statements will be subject to the Trustee’s scrutiny.

Beyond that I cannot be more specific. I would recommend you list all the creditors you can while you’re under the Automatic Stay, before the Creditors Meeting. Your attorney knows the deadlines. Good luck.